I’m new to the game of building wealth through IP. I have been doing a lot of research and investing in education and have attended several meetings with Investment groups but feel that I would like to attempt going through the process of purchasing properties by myself.
I have a PPOR which is tied to a LOC with the loan almost being payed off. I am going to not pay this off in order to use the LOC for deposits and costs for the purchase of IPs.
I was hoping to get some advise on what my next steps would be to get things going.
Do I start shopping around for loans with lenders now? What loans should I be looking for? Do I really need to consult a broker? etc.John
Hi John,
You don’t need to use a broker, but why wouldn’t you? You’re unlikely to attain their level of knowledge (if they are any good) without a lot of work and they don’t cost you anything.
Regards
AlistairHi John
I have dealt with Alistair Perry on a number of occasions and sent him a number of clients. His family company are town planners so Alistair really understands finance from an investment point of view.
You are wise not dealing with marketing companies. Most of these groups make around $25,000 in commission. Either do it yourself but make sure you do the research or use someone like me who will also teach you about the processes.Nigel Kibel
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Thanks guys, I think I’ve just made a decision and found someone that can help.
Using the LOC for deposit and costs is not such a bad idea – But Personally I would put a split in your loan in order to simplify the accounting for your tax agent and to ensure you are able to see clearly how much interest you have paid as these costs are a tax deduction as is the interest paid on them.
Any decent Broker will be able to arange this for you with a minimum of fuss. Anyone who tells you not to bother is obviously not interested in ensuring you get to maximise your investments and doesn’t deserve your business. Take it elsewhere.
All in all you have the final say in any structure so make sure you are 100% satisfied prior to signing your loan documents.
Best of Luck.
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055I would pay off your PPOR as it is a non-deductable debit.
With most LOC even if you pay it off the account is still open and you can draw back on it for deposits and costs.
ChrisAll post are IMHO.
If using a LOC on your existing home, then you are probably paying all income etc into this loan. Just becareful if you start using this for investments as it can have serious tax consequences if you mix investment and non investment portions.
Terryw
Discover Home Loans
Parramatta
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Hi John
Now that you’ve got some great advice on the finance side of things, I’d suggest you race out and get a book called, “How to Legally Reduce Your Tax”. One of the authors is Ed Chan. It’s got to be the best educational tool around, for the price, on structuring your business. It’s only $25 and it’s a very easy read. Good luck.
Cheers, Paul
Paul & Karen Dobson
negative2positive
Turn your negatively geared property into a positive cashflow investment.
Phone: (02) 4984 9540Paul Dobson | Vendor Finance Institute
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Email Me | Phone MeAn alternative way to finance your home.
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